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OmniVision Technologies, Inc. (NASDAQ:OVTI) notched another 52-week high of $20.48 yesterday, in its latest display of technical prowess. The image sensor name has slapped on over 44% year-to-date, propelled largely by an earnings beat in late May. Most pertinent to our discussion here, however, is the fact that yesterday's fresh peak had option traders coming out of the woodwork to bet on extended gains for OVTI through the end of the week.
Specifically, call volume on OmniVision Technologies was well over two times its typical daily amount, and nearly four times the number of puts traded. Leading the way was the in-the-money June 20 call, which saw over 2,500 contracts change hands, 86% at the ask price -- suggesting buyer-driven activity -- at a volume-weighted average price (VWAP) of $0.33. Furthermore, an overnight surge in open interest at the strike indicates the contracts were purchased to open.
For Tuesday's bulls to profit on the play, they need the shares of OVTI, which are currently priced at $20.17, to head north of $20.33 (strike price plus VWAP) through option expiration this Friday. They stand to gain penny-for-penny with any movement past that point, so the potential upside is limited only by the price of the underlying. By contrast, the most the speculators can lose is the premium paid.
In spite of OmniVision Technologies, Inc.'s (NASDAQ:OVTI) technical strength, option traders are surprisingly bearish toward the stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), OmniVision's 10-day put/call volume ratio ranks in the 66th percentile of its annual range, meaning puts have been scooped up over calls at a faster-than-usual pace. Meanwhile, the equity features a Schaeffer's put/call open interest ratio (SOIR) that ranks in the 76th percentile, compared to readings taken in the past year -- again pointing to a bearish bias.